Transcription

1 Dr. Ulla Mikota Deputy Director General German Federal Ministry for Economic Cooperation and Development (BMZ) The BMZ initiative for an International Tax Compact Keynote speech, held at the International Tax Compact Workshop (Brussels, January 2010) Thank you Mr. Balzer, It is a pleasure for me to take over. Assistant Deputy Director General Lorea Arribalzaga, Director of General Affairs Klaus Rudischhauser, dear colleagues and representatives from development partner countries and organisations, Ladies and Gentlemen, good morning to everybody! It seems to be a very productive Monday morning. As the representative of the BMZ, the German Federal Ministry for Economic Cooperation and Development, I am very pleased to be able to welcome so many of you here today. At the first International Tax Compact event - just a year ago in Berlin - the numbers were decidedly smaller. For today s event, which the BMZ has organised jointly with the Spanish Ministry of Foreign Affairs and Cooperation and the EU-Commission, we have representatives from 27 partner countries and from a number of international organisations. Some of you have made very long journeys in order to be at this workshop. We are very pleased about that and see it as confirmation that a forum like the International Tax Compact is needed as a joint dialogue and learning platform about issues relating to development cooperation in tax matters. What is the background of the International Tax Compact? Transparent, fair and functioning public finance systems are one of the most important basic requirements for poverty reduction, sustainable, self-determined development, stability and good governance. They not only mobilise funds but also create legitimacy for state action and foster a good relationship between citizens and their governments. Although we have known all of this for a long time, international development cooperation has mainly concentrated on the expenditure side of the budget cycle. It is only recently that more weight has been placed on the income and the revenue side as well. This change was triggered, as you know, by the conferences on financing for development in Monterrey in 2002 and in Doha in At those conferences an agreement was reached that not only more funding for development cooperation needed to be made available by the donors, but that greater efforts were also needed in our partner countries in order to mobilise their own national resources, particularly by increasing their tax revenues. Since the average tax to GDP ratio in our partner countries is currently 17% (whilst the OECD average is 35%), there seems to be a huge potential for self-reliance and self-determination in financial matters. We are all aware that our partner countries in particular feel the negative effects of tax 1

2 evasion and tax avoidance especially strongly. The result is that they are denied the funds they urgently need for investments in education, and other forms of social infrastructure. As you know, these losses are estimated to be several times higher compared to what donor countries spend each year on global development aid in the form of Official Development Assistance. Against the background of these two developments- the discussion about financing for development and the discussion about effective ways to tackle tax evasion and tax avoidancethe BMZ decided to launch a development policy initiative for an International Tax Compact. We intend this as an informal dialogue and learning platform for donor countries, partner countries and international organisations, where they can agree as equal actors on concrete joint activities based on best practices for fostering transparent, fair and functioning tax systems in partner countries within the framework of international development cooperation and of effectively fighting tax evasion and tax avoidance. At the first event in Berlin we announced that we were willing to finance a coordination secretariat for this purpose. This ITC Secretariat already exists and has begun working. The contact person at the Secretariat is Dr. Ute Eckardt. (I m sure you will get to know her personally very soon). Mrs. Eckardt has been working in this area for many years and played a major role in the preparations for today s workshop. I would like to take this opportunity to say a warm thank you to her and the entire GTZ support team for all their hard work. And my thank of course goes as well to everybody who has made this workshop possible like in particular Mr. Wollny from BMZ. Before I m going to say a few words on the intended concrete results of the workshop and of the ITC in the month ahead, let me briefly refer to the current political environment of the initiative. Following last year s election, Germany now has a new government since November The most important and encouraging message for us here today is: the topic is still high on the German development cooperation agenda. The new government s Coalition Agreement states that good governance, ownership and self-help in our partner countries will play an even more prominent role in the future as core defining elements of German development cooperation. Greater attention is also to be given to partner countries own efforts to mobilise domestic funding. A key instrument when it comes to putting all of this into practice is, we feel, the International Tax Compact initiative. It will play a pivotal role in German development cooperation in the future as well. And for this in respect to our initiating role with ITC, we can build on more than 30 years experience of German development cooperation in fiscal matters. In the past we have worked with numerous countries in Latin America, Africa, Asia and South-East Europe to carry out bilateral cooperation-activities in areas such as tax, fiscal decentralisation, budget supervision, procurement and fighting corruption. Many of these cooperation-activities are still ongoing and new projects have been added. During our G8 Presidency in 2007, we successfully campaigned for the G8 Action Plan for Good Financial Governance in Africa and we are pleased that the African Development Bank 2

3 and the UN Commission for Africa have begun discussing an African Agenda for Good Financial Governance. Supporting regional organisations is another important part of German development cooperation. In Africa the main organisations are the recently founded African Tax Administration Forum (ATAF), the Collaborative Africa Budget Reform Initiative (CABRI), the African Organization of Supreme Audit Institutions (AFROSAI), the East African Community (EAC), the Economic Community of West African States (ECOWAS) and the UN Commission for Africa (UNECA). In Latin America we can look back on long years of cooperation with the Centro Interamericano de Administraciones Tributarias (CIAT) and with the Economic Commission for Latin America and the Caribbean (ECLAC). Furthermore, Germany has been cooperating with the International Monetary Fund (IMF) on support for Regional Training Centres in Africa since 2002 and has now also expanded this cooperation to include an IMF training centre in Central America. We are the first donor country to contribute to the newly set-up IMF Trust Fund on Tax Policy and Administration, from which partner countries will be able in future to receive targeted support for reforming their tax systems. In October 2009, we signed a Memorandum of Understanding with the IMF for even closer cooperation which will also include joint Technical Cooperation activities in bilateral programmes and closer coordination between the various initiatives supported by the BMZ and the IMF. Germany also is deeply committed to supporting global approaches such as the Extractive Industries Transparency Initiative (EITI), which now includes 30 developing countries as members (and in which, I have the honour to serve as a board member at present). Last, but of course not least: What are our expectations for the workshop? All in all, there are a lot of activities going on, co-financed by Germany and many other development partners, who are involved in this issue of taxes. However, in spite of all these accumulated experiences and commitments, we feel that we are still very much at the beginning of understanding the real dimensions of the problem and how we should address it! Enhancing tax revenues is not an end in itself. We do not want to make the rich even richer and the poor even poorer. On the contrary! The Doha Declaration of 2008 calls upon us to undertake tax reforms I quote "with an overarching view to make tax systems more propoor". This must be the overarching goal and the driving force, and it raises the question of equity as well as the question of how to structure tax systems in such a way that they serve as an incentive for poor people to develop their own economic potential and do not hinder them. Another challenge is the question of how to link a pro-poor revenue policy with a pro-poor policy on the expenditure side. Very often our projects still seem to be too technical and too isolated. We have to develop a much more holistic approach and try from the very beginning to link measures on the revenue side with measures on the expenditure side. Programmes for public financial management, budget support, development planning and debt relief must go 3

4 hand in hand with tax reform and enhanced transparency initiatives in order to lay down a robust foundation for sustainable economic and social development, strong civil society participation and reduced dependency on external aid. There are a lot of other very interesting topics on the international development agenda, for instance: What are the different regional experiences regarding development cooperation in tax matters? What are the prospects for enhanced South-South cooperation? What are the most serious constraints for developing countries when it comes to implementing international tax standards? How can we harness the illicit flow debate for our development cooperation? What can development cooperation do to foster developing countries capacity for handling the problem of transfer pricing? Are there already lessons to be learnt from EITI? Do we have a sufficient understanding of the political economics of tax reform in developing countries? What is the role of taxes in state-building? Other fora especially the UN Tax Committee, the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes and the International Tax Dialogue have already made valuable contributions to these topics. However, there is a strong feeling that the development dimension of the problems should be stressed more strongly. That is not only the feeling within the European Union, where Spain is currently putting the item high on the agenda of its EU Presidency, but also within the OECD and in our partner countries- as you know, right after our workshop, on 27 and 28 January, there will be two important OECD events on taxation and development and domestic resource mobilisation in Paris. Our ITC workshop is very likely not going to produce definitive answers for all these issues. However, I am certain that it will provide important inputs particularly from the point of view of our partner countries and that it will hopefully also mark the first steps in terms of concrete implementation measures. We want the ITC to be highly operational! Tomorrow, at the end of the workshop, we hope to be in a position to constitute a core group of like-minded partners who are willing to engage in more concrete cooperation commitments. Those could be: designs for best practice dissemination, enhanced South-South cooperation, joint studies at the country or regional levels, or whatever else the workshop deems it necessary to address. We also wish to invite interested partners to join us in the work of the ITC Secretariat, especially partners from developing countries. This involvement can range from internships or secondments to co-financing arrangements. In the long run, the Secretariat should also reflect the multi-partner approach of the ITC itself. 4

5 As you see, there are many issues to discuss, and we do hope we have been able to include them in the agenda for the workshop. I wish all of us interesting and fruitful discussions, concrete results and successfully networking! Thank you very much for your attention!!! 5

International Cooperation in Transfer Pricing A joint initiative by the OECD, the WB/IFC and the EU Lee Corrick, OECD Rich Stern, World Bank/IFC Inmaculada Montero, European Commission Transfer Pricing

Harmonizing cyberlaws and regulations: the experience of the East African Community CTO Cybersecurity Forum 2013 26 April 2013 Yaoundé, Cameroon Cécile Barayre Programme Manager, E-Commerce and Law Reform,

Statement by Mr. Jun AZUMI, Minister of Finance of Japan, at the Forty-Fifth Annual Meeting of the Board of Governors of the Asian Development Bank (Manila, Philippines, May 4, 2012) 1. Introduction Mr.

ECONOMIC AND FINANCIAL COMMITTEE Brussels, 2 September 2002 EFC/ECFIN/352/02 Common Understanding - The role of the IMF in the Poorest Countries The main objective of the IMF is to promote macro-economic

Statement by the Executive Secretary of the Economic Commission for Latin America and the Caribbean, ECLAC, Dr. José Antonio Ocampo, in the name of Regional Commissions of the United Nations It is a great

ESP European Strategic Partnerships Observatory policy brief 15 november 2014 South Korea and the European Union: A promising partnership for development cooperation? Sung-Hoon Park In 2010, the European

Country Ownership of Policy Reforms and Aid Effectiveness: The Challenge of Enhancing the Policy Space for Developing Countries in Aid Relationships Statement by Louis Kasekende, Chief Economist, African

DEVELOPMENT COMMITTEE (Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund On the Transfer of Real Resources to Developing Countries) INTERNATIONAL BANK FOR WORLD BANK RECONSTRUCTION

CAPACITY DEVELOPMENT OF AFRICAN TAX ADMINISTRATIONS CHALLENGES AND OBSTACLES ATAF Presentation at the International Tax Compact Workshop: Joining Forces to Mobilize Domestic Resources for Development By

THE PROCESS OF PLANNING AND INSTITUTIONAL FRAMEWORK FOR POVERTY REDUCTION STRATEGY: THE CASE OF UGANDA. By Margaret Kakande Poverty Analyst Ministry of Finance, Planning and Economic Development, Government

G8 ACTION PLAN: APPLYING THE POWER OF ENTREPRENEURSHIP TO THE ERADICATION OF POVERTY The UN Commission on the Private Sector and Development has stressed that poverty alleviation requires a strong private

Aid for domestic resource mobilisation: how much is there? Tim Strawson and Guto Ifan www.devinit.org Briefing 2014 February Development Initiatives exists to end absolute poverty by 2030 Mobilising domestic

The Partnership for Sustainable Textiles We all agree that we do not wish to have clothes touching our bodies that have been produced in places where human rights are being trampled underfoot and people

Consultation on the first quadrennial report of the EU on the implementation of the 2005 UNESCO Convention on the protection and promotion of the diversity of cultural expressions Contribution of the European

EUROPEAN UNION The President's Office Committee of the Regions GSPI/2011/03 Keynote speech by the President of the Committee of the Regions Mrs Mercedes Bresso 6 th Annual Brussels Climate Change Conference

POLICY BRIEF SMAF AND THE EXTRACTIVE INDUSTRIES IN AFGHANISTAN February 2016 Natural resource exploitation has the potential to be a major source of economic development and government revenue for Afghanistan,

Supporting the Development of More Effective Tax Systems A REPORT TO THE G-20 DEVELOPMENT WORKING GROUP BY THE IMF, OECD, UN AND WORLD BANK Supporting the Development of More Effective Tax Systems A REPORT

Prof. Dr. Georg Cremer Family policies matter! National policies against poverty and social exclusion of families Brussels, 22nd and 23rd of January 2014 Context and aims of the symposium Ladies and Gentlemen,

Mario Draghi: Europe and the euro a family affair Keynote speech by Mr Mario Draghi, President of the European Central Bank, at the conference Europe and the euro a family affair, organised by the Bundesverband

President's Summary of Outcomes from the Experts Meeting on Corruption 12 October 2013 The Financial Action Task Force (FATF) and the G20 Anti-Corruption Working Group jointly convened an Experts Meeting

COMPREHENSIVE HIGH-LEVEL MIDTERM REVIEW OF THE IMPLEMENTATION OF THE ISTANBUL PROGRAMME OF ACTION FOR THE LDCS FOR THE DECADE 2011-2020 CONCEPT NOTE 1 I. Introduction This concept note addresses issues

E/C.18/2012/CRP.14 Distr.: General 11 October 2012 Original: English Committee of Experts on International Cooperation in Tax Matters Eighth Session Geneva, 15-19 October 2012 Item 3 (b) of the provisional

Joint Declaration On the Establishment of the Regional Co-operation Council (RCC) Representatives of the Participating States of the South East European Co-operation Process (SEECP), the United Nations

1. Introduction IBIS Global Strategy for Democratic Governance, Citizens Rights and Economic Justice 2012-2017 IBIS believes that the direct participation and influence of a well organised, competent and

United Nations Capacity Development Programme on International Tax Cooperation Progress Report Newsletter of FfDO/DESA Number 2015/1, April 2015 Highlights UN Handbook on Tax Base Protection for Developing

REMARKS BY MR. JAVIER GUZMÁN CALAFELL, DEPUTY GOVERNOR AT THE BANCO DE MÉXICO, ON GLOBAL ECONOMIC GOVERNANCE: RECENT PROGRESS AND SOME REMAINING CHALLENGES, SESSION ON GLOBAL GOVERNANCE: THE RISE OF NEW

A NEW DEAL for engagement in fragile states THE FACTS 1.5 billion people live in conflict-affected and fragile states. About 70% of fragile states have seen conflict since 1989. Basic governance transformations

FEBRUARY 2005 DEPARTMENT FOR POLICY AND METHODOLOGY POM Working Paper 2005:2 Programme Support and Public Financial Management Content Summary... 3 1. Introduction... 5 2. The Quality of Public Financial

Okinawa Charter on Global Information Society 1. Information and Communications Technology (IT) is one of the most potent forces in shaping the twenty-first century. Its revolutionary impact affects the

Brussels, 24 March 2014 140324/01 F A C T S H E E T EU-US Summit (Brussels, 26 March 2014) and EU-US relations The Leaders of the European Union and the United States of America will meet on 26 March 2014

A presentation to the ACP EU Economic and Social Interest Group, Brussels, 5 March 08 : Human Resources Development for Economic Development examples and lessons from ACP countries Brenda King Member of

Open Days Event: The RFSC Conference 2013 Towards a European Model of a Sustainable City Opening address by Johannes HAHN, Commissioner for Regional Policy Brussels, 9 October 2013 I am Viennese - born

Reviving local public investments Flexibility is needed in the existing rules of the Stability and Growth Pact CEMR Position paper December 2015 Council of European Municipalities and Regions Registered

CHAPTER 11: The Problem of Global Inequality MULTIPLE CHOICE 1. The claim that poverty is unethical is essentially a. Normative c. political b. theoretical d. scientific 2. Self-interest is an important

Council of the European Union Brussels, 14 November 2014 (OR. en) 15206/14 FREMP 198 JAI 846 COHOM 152 POLG 156 NOTE From: To: Subject: Presidency Council Ensuring respect for the rule of law in the European

Session 6: Budget Support Paper 6.1 - Introductory Paper on Budget Support [1] Introduction Budget support has become an increasingly important instrument of development assistance. It has not only received

AFD AND THE PEFA METHODOLOGY APPLIED TO LOCAL AUTHORITIES Enhancing public financial management at local level Yaoundé AFD LOCAL AUTHORITIES: KEY ACTORS IN URBAN DEVELOPMENT POLICIES FOR AFD Rapid urbanization

Presentation by Mr Richard Bruton, Minister of Jobs, Enterprise and Innovation to the Industry Research and Energy Committee of the European Parliament, Brussels Wednesday 23/1/2013 Check against Delivery

MC.DOC/2/12 Organization for Security and Co-operation in Europe Ministerial Council Dublin 2012 Original: ENGLISH Second day of the Nineteenth Meeting MC(19) Journal No. 2, Agenda item 7 DECLARATION ON

PART 2 OF A REPORT TO G20 DEVELOPMENT WORKING GROUP ON THE IMPACT OF BEPS IN LOW INCOME COUNTRIES 13 AUGUST 2014 TABLE OF CONTENTS Executive Summary... 3 Section 1: Introduction and background... 6 Section

Part 1. Concepts, Tools and Principles 3 Overview Part 1. MfDR Concepts, Tools and Principles M anaging for Development Results (MfDR) is multidimensional, relating back to concepts about how to make international

European Council Brussels, 20 March 2015 (OR. en) EUCO 11/15 CO EUR 1 CONCL 1 COVER NOTE From: General Secretariat of the Council To: Delegations Subject: European Council meeting (19 and 20 March 2015)

AIDE-MEMOIRE UN Panel on Civic Engagement for Urban Governance and Inclusive Development: Opportunities and Challenges in the context of the World Conference on the Development of Cities, Porto Alegre,

Strengthening the ties that bind us together: the role of the ASEM Education Process for ASEM Dialogue and Cooperation - from a European perspective Tibor Navracsics, Commissioner for Education, Culture,

Effective Technical Assistance in Crime Prevention & Criminal Justice What are the key c components? Margaret Shaw International Centre for the Prevention of Crime www.crime-prevention-intl.org September

Speech by Mr Rudolf Peter ROY, Head of division for Security Policy and Sanctions of the European External Action Service, at the L COSAC Meeting 29 October 2013, Vilnius Honourable members of the National

Progress The EU programme for employment and social solidarity 2007-2013 Ensuring the Community can play its part to support Member States commitments to create more and better jobs and offer equal opportunities

COMMUNICATION ON PROGRESS SAP YEAR 2008 Statement SAP is an early endorser of the United Nations Global Compact with signature recorded in 2000. We remain committed to promoting all ten principles both

Address by Mr Koïchiro Matsuura, Director-General of UNESCO, on the occasion of UNESCO Regional Conference in Support of Global Literacy, Addressing Literacy Challenges in Europe with a sub-regional focus:

COU CIL OF THE EUROPEA U IO EN Conclusions on Preparations for the 19th session of the Conference of the Parties (COP 19) to the United ations Framework Convention on Climate Change and the 9th session

To ensure the functioning of the site, we use cookies. We share information about your activities on the site with our partners and Google partners: social networks and companies engaged in advertising and web analytics. For more information, see the Privacy Policy and Google Privacy &amp Terms.
Your consent to our cookies if you continue to use this website.